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The Vermont Common Assets Trust
Thu, 03/10/2011 - 11:40
At a time when Republican-dominated legislatures in the Midwest are slashing state budgets and declaring war on the middle class, some visionary politicians in the State of Vermont are proposing an ingenious way to use state assets to benefit everyone equitably, while protecting the natural environment.
Eleven state Representatives have just introduced legislation, H.385, that would declare certain natural resources to be common assets that belong to all citizens of the state. These assets would then be protected by a new type of entity, the Vermont Common Assets Trust, whose foremost duty would be to protect the common assets for present and future generations.
Where appropriate, the Trust would generate revenues from those assets (such as selling water extraction rights to bottlers or timber-harvesting rights) that would directly serve the citizens of the state. The money would not flow through the legislature, but would be managed directly by the Trust. (The full text of the legislation can be downloaded here as a pdf file.)
Here’s another exciting aspect of the legislation: it would expand the scope of the public trust doctrine in environmental law. Instead of covering just navigable waters and shorelines, the public trust doctrine would explicitly apply to “undisturbed habitats, entire ecosystems, biological diversity, waste absorption capacity, nutrient cycling, flood control, pollination, raw materials, fresh water replenishment systems, soil formation systems, and the global atmosphere.” It would also apply to “social assets such as the Internet, our legal and political systems, universities, libraries, accounting procedures, science and technology, transportation infrastructure, the radio spectrum and city parks.”
To implement this idea, the trust fund would establish a framework under which certain users of common assets “may be assessed fees that would be deposited into a common assets trust fund.” (The actual systems of implementation would be based on recommendations from an advisory committee.)
Like the Alaska Permanent Fund – a commons trust that collects a royalty from oil extraction within the state – the Vermont Common Assets Trust would collect revenues from any uses of common assets and invest them in the trust fund. It would then disperse dividends to the citizens of the state. The money could be spent for activities that “enhance the common assets” and for activities that benefit all citizens of the state, such as health care, public education, libraries, Social Security enhancements, and startup grants for young people when they become 18 years old.
Significantly, the bill stipulates that a minimum of 25 percent of disbursements of the fund be paid out directly as dividends to each citizen of the state. This would be a direct and welcome reminder to everyone that they are, in fact, owners of many important common assets. Citizens of Alaska are grateful every year when they receive anywhere from $1,000 to $2,000, on average, as dividends from the Alaska Permanent Fund. The dividend in 2010 was $1,281.
A great deal of credit for advancing this idea should go to Peter Barnes, the entrenpreneur-turned-activist who proposed the idea of citizen trusts in his 2006 book, Capitalism 3.0: A Guide to Reclaiming the Commons. A big salute, too, to the Vermont legislators who introduced the bill: Representatives Christopher Pearson, Margaret Cheney, David L. Deen, Sarah Edwards, Tony Klein, Jim Masland, Carolyn W. Partridge, Kesha K. Ram, Dave Sharpe, Rachel Weston and Suzi Wizowaty. Now the big challenge is to get this legislation enacted!
Update, March 21, 2011:
To give some perspective on this initiative, It's worth noting its seven-year history. It started with Professor Gary Flomenhoft's idea that there should be a state trust called the Common Assets Permanent Fund, modeled on the Alaska Permanent Fund. Flomenhoft, a Lecturer and Fellow at the University of Vermont's Gund Institute for Ecological Economics, publicly introduced the concept in Vermont on December 7, 2004 (see powerpoint slides here), which resulted in eco-economist Robert Costanza persuading state senator Hinda Miller to introduce legislation, S.44, in 2007.
During formulation of the bill, then-legislative council Al Boright played a key role in adapting the ideas of Peter Barnes’ Capitalism 3.0 into suitable statutory language. In addition, the name of the legislation was changed to "Common Assets Trust Fund" and the scope of the public trust doctrine expanded. It’s also worth noting that there is a groundwater extraction bill, H.407, introduced by Dave Sharpe, that would recover public benefits from private commercial uses of groundwater. More here.
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